Why You Can’t Take Airbnb to Court Even If You’re Discriminated Against
Airbnb’s policies aren’t unique.
Racial discrimination by Airbnb hosts may have been proven in research studies and shared through hundreds of anecdotes on social media via the #Airbnbwhileblack hashtag. But getting acknowledgment of that discrimination in court? That’s unlikely.
A case filed against Airbnb that accused the company of facilitating racial discrimination hit a serious roadblock this week when a judge ruled in favor of Airbnb, saying that a mandatory arbitration clause in Airbnb’s 17-page terms of service was enough to notify users to that they’re not allowed to bring a civil lawsuit against the company.
Airbnb’s spokesman, Nick Papas, told The New Yorker that the company’s policies are similar to other companies’ and that “arbitration is an effective way to resolve many issues.”
It’s true that arbitration is very common. Netflix and Amazon both have it in their policies, most major cell phone contracts require them, and so, too, do many credit card companies, bank accounts and private student loans. The clauses are usually in the fine print, and they force you to use a private forum to settle disputes instead of the judicial system.
Whether it’s an effective way to resolve issues, as Papas alleges, depends on your point of view. Arbitration is usually preferred by companies because it reduces legal expenses.
Yet class-action lawsuits offer consumers more opportunities for financial redress than arbitration or individual lawsuits, according to the Consumer Financial Protection Bureau. Plus, the CFPB found that three out of four people surveyed last year did not know whether they had signed away their right to bring a lawsuit against a financial company.
Airbnb ducks potential racial-discrimination battle
From the New York website: Airbnb dodged a potential class-action lawsuit Tuesday when a federal judge ruled that the company’s arbitration policy prohibits users who say they were discriminated based on their race from suing the company.
The case began in May when Gregory Selden, who is African American, claimed that an Airbnb host would not rent him a room because of his race.
Airbnb was already facing pressure after a working paper by Harvard University researchers in December found it was more difficult for guests with African American-sounding names to rent rooms on the site.
But on Tuesday, a federal judge said that Airbnb was covered by its user agreement, which says disputes must be settled through private arbitration, the New York Times reported.
As long as those arbitration details are made clear to customers, they are “enforceable, in commercial dispute and discrimination cases a like,” according to the ruling by Judge Christopher Cooper of the United States District Court for the District of Columbia.
The decision means Airbnb most likely won’t be caught up in a high-stakes legal battle over the issue. The same can’t be said about its operations in New York, where Airbnb is suing officials after Gov. Andrew Cuomo passed a law that will fine users who advertise illegal short-term listings.
Airbnb Promotes Diversity to Prevent Booking Discrimination by Hosts
Airbnb Inc. is taking steps to promote more inclusive lodgings on its site after facing accusations from renters who say they were discriminated against by hosts because of race or other characteristics.
The room-sharing company said Thursday it would minimize users’ photos during the booking process; require antibias training for its employees; push hosts to use a feature that instantly books rooms; and create a team focused on promoting diversity, among other changes.
Some would-be renters have contended that Airbnb hosts denied them lodging after identifying their race or sexual identity through their photos, names or other means. The San Francisco company has sought to damp the controversies, in part, by hiring former U.S. Attorney General Eric Holder and Laura Murphy, a former American Civil Liberties Union director, to advise the company.
“An increasing number of Airbnb hosts and guests have voiced their concerns about being discriminated against when trying to book a listing because of their race, sexual orientation or gender identity,” wrote Ms. Murphy in an internal report released by Airbnb. “This outcry from the community led Airbnb to closely examine their nondiscrimination policies and procedures.”
An Airbnb spokesman declined to comment beyond the report.
Silicon Valley companies have come under increasing fire for their lack of diversity in relationships with minorities, particularly in hiring, which critics say hampers their ability to craft products and services that have the broadest appeal. As a result, many have implemented antibias training and detailed their workforce makeups.
The controversy surrounding Airbnb came to a head following a widely cited Harvard University research paper in December that found that customers with names that sounded black were 16% less likely to be accepted for rentals than others with white-sounding names. It spawned the Twitter hashtag campaign, #AirbnbWhileBlack, and later prompted Airbnb Chief Executive Brian Chesky to vow to combat discrimination on the room-sharing site.
Figuring out the Tech Solutions to Airbnb’s Racial Discrimination Problem
Airbnb is facing a lot of challenges these days, whether they be regulatory clampdowns in major cities like New York City and Berlin to the growing awareness of the potentially discriminatory pitfalls of its peer-to-peer platform.
The latter has spawned an entire movement (just search for the hashtag #AirbnbWhileBlack on Twitter), given birth to a class-action lawsuit, and has spurred other entrepreneurs to launch their own versions of Airbnb that cater more to specific communities.
Recent concerns about racist, discriminatory behavior from Airbnb’s hosts were also serious enough to prompt Airbnb CEO Brian Chesky to address them directly at Airbnb’s annual OpenAir tech conference in San Francisco on June 8.
Opening the conference, Chesky said, “There’s been a lot of news about prejudice and bias on our platform, and this is a huge issue for us.” He added, “We have zero tolerance for it and we will take swift action.” Chesky also pledged to work on resolving these issues, and asked for the tech community’s help in coming up with solutions.
“In the next months, we will be revisiting the design of our site from end to end to see how we can create a more inclusive platform. We’re open to ideas. It’s a really, really hard problem and we need help solving it. We want to move this forward. I myself have engaged with people who have been victims of discrimination on the platform. We take this seriously,” he said.
In a recent New York Times article, the company also said it would be making an announcement about its preliminary efforts to address discrimination on its site within the next week, and that it plans to debut a full report with solutions by September.
This isn’t the first time Airbnb has had to address issues of discrimination, bias, or prejudice on its site, however. As far back as 2014, researchers at Harvard Business School noted the possibility of racial discrimination against hosts by guests using the platform. Their study found that hosts who were not African American could charge 12 percent more, on average, with everything else being equal.